Tax Evasion

By Rabbi Daniel Travis

And Yosef imposed a twenty percent tax on the land of Egypt, which is still
prevailing today... (Bereshith 47:26)

Yosef displayed both wisdom and sensitivity in the way he levied this tax.
Before he declared it to be law, he explained to the residents of Egypt the
uprightness of establishing such an obligation. In doing so he won the
confidence of the people, and insured that they would not feel that their
money was being taken unjustly. Only then did it become part of the
country's legislation.1

As unpleasant as it may be to give over large percentages of one's
earnings, the halachah gives the ruling powers, both on the municipal and
national levels, the right to collect taxes. Since they have jurisdiction
over the land, they have the right to ask for a reasonable compensation
from the residents of the land. If the inhabitants do not pay, the
government can force them to leave their land. Therefore, anyone who does
not pay taxes has violated the Torah prohibition against theft.2

The above halachah is only applicable if the ruling power makes a set tax
which has equal standards for every resident of that area. If they single
out a certain individual and unfairly tax him disproportionately to the
other inhabitants of the land, they are considered thieves, and according
to Torah law one is not required to pay such taxes.3 Likewise, if those who
presently have control of the state are not recognized by the residents of
the land as the ruling authorities, they do not have a right to collect
taxes from the inhabitants, and if they do so they are considered thieves.4

Nonetheless, whatever the circumstances may be, there is absolutely no room
to sanction taking money from the government which is not rightfully
yours.5 This could cause a desecration of God's name, one of the most
serious transgressions. In addition, it may cause taxes to be raised, which
would classify those who caused it as gozel eth harabim (having stolen from
the public).6 This in effect means that they have stolen from every person
in that area, an act for which it is nearly impossible to repent properly.